Bush Receives Loans of a Type He Now Wants Banned: Report

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Last updated at: (Beijing Time) Friday, July 12, 2002

Bush Receives Loans of a Type He Now Wants Banned: Report

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US President George W. Bush received two low-interest loans to buy stocks from an oil company where he served as a board member in the late 1980's, benefiting from insider transactions he now wants to end, The New York Times reported on Thursday.

The loans from Harken Energy allowed Bush to acquire 105,000 shares in the company through a stock option program that was available to top corporate officials. Harken did not require repayment of the principal for eight years and charged 5 percent annual interest. The prime rate in December 1986, when Bush received the initial loan, was 7.5 percent.

Such loans were not uncommon among companies seeking to promotelong-term shareholding among executives and directors. A series ofrecent corporate accounting scandals, however, have raised questions over the practice.

On Tuesday, Bush called for a halt to those types of insider transactions, challenging corporate directors to "put an end to all company loans to corporate officers."

Dan Bartlett, the White House communications director, said that while such loans had been properly used by many companies to encourage long-term share ownership, they had in some cases recently been abused.

Bartlett said Bush never profited from the Harken loans becauseafter Harken changed its stock option program, Bush returned the shares in exchange for new options that he never exercised.

After Bush sold his Harken stock in June 1990, the Securities and Exchange Commission opened an investigation into whether he had knowingly sold the stock in advance of worse-than-expected financial results that temporarily drove down Harken's share price.

The SEC took no action against Bush. But the issue has dogged him politically for almost a decade and has again come up in recent weeks as accounting and insider trading accusations have dominated the headlines.

Democrats have seized on it again in an attempt to draw a contrast in the president's business record and his call for more ethical corporate behavior. Bush dismissed questions over his dealings in the past as "old politics."

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